Tax revenue up, but so is spending. (My response included)
Ithaca tax revenue from '01-06 outpaces other cities in region; development cited
By Krisy Gashler • Journal Staff • September 30, 2008
ITHACA — Expenditures by the City of Ithaca rose 30 percent in six years, while revenue generated from property tax jumped 79 percent.
Budget data available through the New York State Comptroller's Office shows that between 2001 and 2006, the most recent data available from the comptroller, Ithaca saw bigger growth in revenues, expenditures and property tax than Elmira, Binghamton and Auburn.
A big reason for this jump was Ithaca's investments to spur development downtown and on Route 13, City Controller Steve Thayer said.
Ithaca Mayor Carolyn Peterson is scheduled to announce her 2009 budget Wednesday at a meeting of Common Council.
Peterson said earlier this year that she was aiming for no more than a 5 percent increase in the tax levy. Common Council last year voted for a 4.71 percent increase in the levy.
Infrastructure development such as road and bridge improvements on Route 13 began in 2002, and debt from that project would have been reflected in the city's 2003, '04 and '05 budgets, Thayer said.
As intended, property tax revenue from the new Route 13 development began off-setting the city's project debt and resulting in a net positive for the city in 2007, he said.
“It certainly has made a positive impact on our budget,” Thayer said.
Later city investment in downtown projects, including $14 million for the Green Street garage alone, will also impact the city's budgets for years to come, he said.
The increase in the city's expenditures far outpaced its neighbors Elmira and Auburn, which are both roughly the size of Ithaca — all three have between 27,000 and 30,000 people, according to the U.S. Census Bureau.
Over the same period that Ithaca's expenditures increased 30 percent, Elmira spent 5 percent more, and Auburn spent 9 percent more.
Ithaca's total 2006 budget was $58.2 million. Auburn's was $45.5 million. Elmira's was $39.3 million.
Binghamton, with roughly 45,000 people, saw its expenditures rise 25 percent over the same period to $87.4 million in 2006.
Ithaca similarly saw the highest increase in revenue, and in revenue collected through property tax.
Paradoxically, all four municipalities increased revenue more than they increased expenditures, while at the same time all spent more than they brought in in 2006.
For example, during the six-year period, Ithaca increased expenditures by 30 percent while it increased revenues by 47 percent. Yet in 2006 the city raised $52.8 million and spent $58.2 million.
Cities fund their budgets through a variety of means, including state and federal aid, fees, sales tax, and property tax.
Between 2001 and 2006, the amount of money Ithaca collects from its residents through property tax rose 79 percent.
Binghamton came in second in this category, increasing its property tax revenues by 52 percent.
Elmira and Auburn both increased property tax revenue by 23 percent during the period.
Increases in property tax collection can come from new development and from tax increases on existing property, said Jay Franklin, assistant director of Tompkins County's assessment department.
Because of changes to the assessment department's database in 2004, it was not possible Monday to determine exactly how much of the city's property tax revenue increase came from new building versus additional tax on existing homes and businesses, Franklin said.
However, typically a 2-3 percent increase in the tax levy can be attributed to new construction, he said.
The 4.71 percent levy increase approved by Common Council last year was the lowest tax levy increase since 2000, Thayer reported last November.
kgashler@ithacajournal.com
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exithacan wrote:
OK, so if the city had greater revenues to offset increased expenditures for 2001-2005, why spend more in2006?
Good thing those nasty RT 13 and downtown developments were built, eh nimbys? Could have been a lot worse tax increases.
Sorry, just trying to stir things up ( ' \_/ ' )